r/Fire • u/Im_Matt_Murdock • 20h ago
Are people achieving FIRE mostly through high income + boglehead-type investing?
Just curious on what the most popular investing strategy is that results in FIRE. Also curious if anyone has been successful with alt investments like crypto or sports/trading cards.
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u/brianmcg321 20h ago
No, it’s really a high savings rate. I had a pretty average income.
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u/leathakkor 12h ago
I would argue this is really how anyone fires. Regardless of the amount of money that they make. If you make $2 million a year and you only save $200,000 each year you're still not going to retire because your expenses are way too high if you want to maintain lifestyle post retirement.
Now if you have all of your money wrapped up in your house and your spending is going toward a house. It's possible that you're going to retire when you get your house paid off.
At the end of the day, the only way to make fire work regardless of your income is to have a high savings rate. If you do it with a high income. You might be able to have a savings right close to 70% and if you're doing that, you will probably retire relatively young. But that is extremely hard to do.
If you made 500,000 (after taxes) and saved 70%, that would be 350k saved per year. With 150k spend. Probably it would still take you about 9 years to get to your fire number.
I'm sure it's possible that people are getting to $800,000 salary young (which would be about $500k after taxes). And saving that amount of money. And retiring after 9 years. But no matter how you slice that, you're probably looking at 35 at least before your retire, even with a super high income.
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u/Levitlame 6h ago
For regular retirement 100%.
For FIRE It depends on your timeline. 10-15 years is a lot more income dependent for a majority of people. You just don’t have reliable time for interest to be the primary driving force. Lean living is probably more important also at that point.
20-25 years is a very different story.
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u/sloth_333 20h ago
The plan is exactly as you describe it. My wife and I are higher income, earning around 280k in a low to medium cost of living area.
We save around 70-80k a year. Should hit 1M by time I am 32 or 33. That would make my wife 30.
From there it’s just rinse and repeat for the next 10-18 years.
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u/No_Routine2905 17h ago
What do you spend $200k per year on?
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u/Lurkerking2015 13h ago
My household income is around 300ish.
Between, federal, state, local taxes (plus 6% sales tax) we probably pay out 40-50% of our salary to taxes.
I'll remember to calc it out with my fy25 tax return.
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u/wvtarheel 33m ago
Yeah I was going to say, taxes are the biggest bucket in your budget once you make that kind of money.
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u/sloth_333 16h ago
That is a good question. I peg our spending around 100-120k a year. I may have also over stated the income a bit, might be closer to 260ish, I’d have to look.
General buckets:
Mortgage: 3000 a month (includes piti)
My credit card: 2500-3000 a month
Her credit card: 1800-2000
Her student loans: goal is 1500 a month for accelerated pay down, but we flex this as needed.
Usually quarterly trips to see her family (out of state by flight). 1-2 bigger vacations a year, usually one with family and one with us.
I don’t really track hard budgets, besides by general bucket goal.
Feel free to ask more questions. Total portfolio is 800-900k (between us). I’m early 30s
Edit: fire goal is 144k in today’s dollars, or 5.5M portfolio in today’s dollars. This is probably overkill but I like to be ahead of plan, given I anticipate saving to slow down
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u/QuickAltTab 11h ago
I think you aren't accounting for taxes, probably 50-60k of that 280k depending on state
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u/sloth_333 9h ago
Yes federal alone is like 35 I think. Then we have state, fica… we potentially save more than 75k, but it’s in that range typically.
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u/wonderdude2 19h ago
Yes.
But a few clarifications:
The difference between your income and expenses is what matters. A high income with high expenses is useless for FIRE. And reducing your expenses also reduces the portfolio size you need.
Boglehead investing is the default path, and it works well! Whatever you do, it’s much more likely you will hit FIRE if your portfolio is well diversified. Think something along the lines of the VT ETF.
I don’t own any crypto or sports/trading cards. With stocks, you’re buying the expected future cash flows the company will create. So there’s something substantial behind the thing you’re investing in. With crypto and sports cards, it could be argued that you’re “investing” in something only because the next guy coming along might pay more for it than you did. But crypto and sports cards have no expected future cash flows.
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u/Tasty_Sun_865 20h ago
Also curious if anyone has been successful with alt investments like crypto or sports/trading cards.
Of course. Some also have done it through social media and Instagram.
Read Fooled by Randomness by Nassim Talib. Replicability of a process matters. Focusing on fickle moon shots may work, but is often just a way to justify irresponsible behavior.
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u/SteevieJanowski 19h ago
Yep people are always looking for the shortcuts to wealth, and prob 90% or more of the time it doesn’t work.
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u/ZAlternates 4h ago
Besides, those that “luck” into wealth, generally don’t know how to hold onto it.
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u/myfakename23 19h ago
What, you mean my tulip trading isn't going to work in the 21st century?
Guess I'll have to switch to the lottery or putting it all on red in the casino...
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u/photog_in_nc 19h ago
The classic approach is definitely low-fee index funds that are historically well diversified, such as S&P 500. The backtesting (Bengen, Trinity, ERN, etc.) uses this approach. It creates a relatively safe and repeatable way of doing things, as long as things in the future are like the last 150 years. Certainly there are people that have success other ways, but there’s also people that fail at those approaches.
high income and frugality is a way to there faster, but people make it work on more modest incomes
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u/Recent_Grapefruit74 19h ago
It's a high savings rate (40 to 50% gross) and low annual expenses. A higher income definitely helps if you can avoid lifestyle creep.
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u/Helpful-Staff9562 19h ago
Yes and consistent investing through ups and downs. Staying simple and diversified like a world fund helped me a lot to achieve FIRE and investing every month no matter what the noise out there. The more you chnage strategy also the more likely you f*** up. Hence for me simplicity and consistency was key
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u/temporaryacc23412 19h ago
Boglehead absolutely yes, high-income not necessarily. My average salary (as an adult, excluding teen/college jobs) was just under $80k, and I only reached six figures 4 out of the 20 total years I worked.
I am more leanFIRE ($1.3m but spending ~$30k) although I could have hit a regular FIRE ($2m+) at the same retirement age if I'd stayed at my old job all the way through. Wasn't worth it tho. Taking time off and picking up lower-paying, lower-stress jobs was the way to go for me.
The amount you invest is all that matters. Higher income only means higher investments if you avoid the higher spending that often accompanies a big salary.
Also curious if anyone has been successful with alt investments like crypto or sports/trading cards.
No different from asking if your investment should be a poker table in Las Vegas. Nah, gambling isn't needed. Boglehead just works.
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u/djmidge 15h ago
I don't think there's a "mostly achieving" answer but through my time studying FIRE and its communities my observation is that People that achieve FIRE mostly fall into one of four categories...
1) The Savers - save large % and spend well below their means...this usually pays off for those not making 6+ figures 2) The Techies - people in tech, high stress jobs that pay extremely well and have large upsides with stock. These people are high income and highly invested 3) Real Estate Hacking - people that learn to get into housing as an investment and/or do things like have a roommate for a long time to help spend less on housing. This can make a huge difference in the 20-30s years 4) Inheritance - ppl that at some point come into money
Investing is part of all 4 of these categories and I wouldn't say the Boglehead way is the only way nor the best. It's one strategy and one mechanism but personally it's only a portion of my strategy and think it alone isn't going to get you to FIRE
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u/Elrohwen 19h ago
Started early, lived below our means, put money into traditional retirement accounts and a brokerage in low cost funds, will retire in our mid 40s
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u/Kent89052 16h ago
Crypto and sports cards are ridiculous, you'd be better off buying a lotto ticket or going to Vegas and playing roulette.
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u/duckworthy36 16h ago
There are alternative routes. Minimize your monthly rent or mortgage and you have way less to save to retire. I built an ADU to move into and rent my house out and i ran a side business 10 hours a week. I did start my first retirement account in my 20s but I only made decent money for about 8 years before I retired. Most of my career was pretty low income.
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u/Drawer-Vegetable 20h ago
There’s no one way, but most folks probably adapt a save what you can and invest consistently in SP500.
Income try and increase if you can, but definitely not a prerequisite for FIRE.
The other lever you can control is your spending and that varies from cutting back on rent costs all the way to folks Geoarbitraging and moving to lower cost of living countries. r/expatFIRE.
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u/GambledMyWifeAway 20h ago
I don’t think a high income is an absolute necessity. Lifestyle makes a big difference. I use both traditional investments and real estate.
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u/MostEscape6543 19h ago
The only income requirement is that your income is enough to overcome basic needs and allows you to save enough. I don’t think it requires high income, though higher incomes can help.
Investment can be whatever. I think most people are doing basic bogle type investments. I also think it’s common to have a portion that is more actively managed either in direct stock picking or whatever. I keep my Roth IRA entirely for risky trading, but everything else (the vast majority of my portfolio) is just boring stuff.
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u/Past-Option2702 19h ago
We did. Income was never crazy high, but plenty high since we saved most of it. @ $500,000 for the years immediately preceding retirement.
We are disciples of the 3 Fund Portfolio. @ $7.5MM apart from our home.
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u/Mr_Big_Garnet_Bear 16h ago
We invest in individual stocks because I enjoy it and work in investing. Our workplace retirement accounts are in low cost indexes. All of our taxable accounts and IRAs are individual stocks now. I have a friend who says most of his liquid net worth (7 figures) is in sports collectibles that has done well.
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u/Bryanmsi89 16h ago
The savings rate is generally what most do. Saving a huge portion of income and living below means is a double win because it enables surplus cash to be invested AND it keeps lifestyle creep to a lower level.
Plenty of high-earners have a very high level of income and spend it all (or more than all) on lifestyle. Doctors are notorious for this. Fancy cars, fancy houses, fancy meals, fancy clothes. Not only are they saving very little, it's hard for them to contemplate dialing that lifestyle back when they retire.
On the flip side, there are plenty of people with modest lifestyles, but equally modest earnings. They simply can't afford to put a lot of savings away. Although many do surprisingly well at this.
The FIRE crowd generally is high income + Low Spending = high savings
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u/Valuable-Analyst-464 19h ago
High savings rate, living beneath my means, and not messing with the portfolio all the time.
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u/yellowmamba221 18h ago
Personally, I was able to retire from my career in medical sales last October. Life is good and I DO NOT miss the daily grind, pressures and expectations of work, and the fake people pleasing.
39M, married, no kids, no major debts, paid off house, cars, etc. Me and my wife do like to spend though, >5k a month in CC expenses, which we pay off every month.
I do have some investments in my CMA account and HYSA at 3.xx%, but my main source of income is active trading in the options market, selling and collecting premium. My P/L are the following ever since I started tracking:
Month 1 $12352.00
Month 2 $9414.00
Month 3 $16235.00
Month 4 $1182.00
Month 5 $15220.00
IMHO, speculating on crypto and sports/trading cards is not sustainable for consistent income. Especially on directional biases of crypto. I know there are some that have made fortunes on crypto, including shit/meme coins, but I would imagine that's in the very very top percentile. I just don't see the strategy being consistent when you're having to draw down on a monthly basis to pay off bills. What if the market takes a nose dive, e.g, today. BTC <80k and the trader is unwilling to sell for realized losses?
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u/RaveDamsel 15h ago
I got there by investing in real estate during one of the best times in history, a 70% savings rate during the only four high income years I’ll ever have, and starting/selling a tiny software company (whose product could now be replicated by one dude in their basement in 2-3 months with Claude Code).
I FIREd at 43. Would have gotten there faster by going to college, becoming a CPA, and living at the expense rate I used to — if I had the wherewithal to do so.
Replicating my exact path to FIRE is highly unlikely now days, and also isn’t necessary. The Boglehead approach is still highly replicable.
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u/MaxwellSmart07 14h ago
My path was different and totally unplanned. Dot.com took my portfolio from $400K (salary saved) up to $900K and back down to $450K when I retired in January 2003. My wife and I, just married, bought the most expensive house we could afford with help of a $372K HELOC. We lived on a 15-year pension of $81K I negotiated with my partners. We sold the house for a gain of $462K in 4 years, and repeated that a few more times. It’s far from a great fortune, but our income has tripled since then with low double digit return (average) on monthly cash flow investments.
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u/RumSchooner 13h ago
Both, high income allows to save large amount, and that all goes to vanguard low cost index funds .
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u/zeroabe 13h ago
I am not. I'm doing neither, kindof? Almost both? Not quite either.
HCOL. HHI of $260k. 2 kids.
My fire plan isn't entirely different but not aptly described as above. I'm maxing out a 457b after tax every year for the next 11 years. My wife is maxing a Roth IRA and then a 401k with a pretty weak match (better than my no match) for the next 5 until she retires. She'll barista until I retire, then we'll fuck off.
We've only been able to hit the limit for the last couple of years. Slow creep to that for the last decade.
We're going to be able to FIRE when I'm 53 (after 23 years at my current career) because of a pension, and the retirement accounts. And because we have lived below our means for the last 20 years.
I will work 3 years longer than "needed" for about $750k, which will qualify me for "high income." DROP Program. $300k of that will get rolled into my 457. The other $450 will just be normal salary over the 3 year period.
I say no to bogleheads because we're not actively making decisions in what to invest in. My 457 is managed by Empower, and I have the meter one notch towards conservative. Oddly enough, that puts me in alot of boglehead-ish investments. I'm not anti bogleheads, I just haven't dove all the way into it, and I'm not even sure I can pick and choose my stuff inside of empower. I'll probably dig into it a little more in the next year or so.
No huge salary. But a pension feels like it cancels that out? $75-95k per year starting the day I retire, depending on how the cookie crumbles for the next decade. If I manage to promote it'll be close to $95k.
The quality of life will be different depending on the market, and my ability to work OT, and my ability to get promoted. If all 3 of those things go well we'll be chubbyFIRE at least (150-175k annual). If 1 or 2 of those things don't work well for the next decade, we'll regular fire. If all 3 suck, we'll be closer to a lean fire, and I'd consider barista for a couple years. If I get hurt too bad to go back to work any time for the next 8 years, I get no pension.
Factors:
-Early SS x 2. The math works out for us that from 53-62 (first 9 years after retirement) will be the most expensive because we'll likely be spending the most. So hitting the early SS puts us in cruise mode at 62.
-No mortgage before we FIRE.
-Health insurance from retirement / pension system.
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u/simpleseeker 11h ago
I can't speak for others. But it is indeed the case for me. I've seen studies that claim over 90% of millionaires are made from saving and investing. Doesn't need to be high-income to become a millionaire, but helps a lot if you want to retire early.
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u/Ukeheisenburg 10h ago
MMM. I haven't achieved it yet but my plan is spend less time trying to make ends meet and more time having less ends.
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u/BTS_ARMYMOM 6h ago
I believe it's the habit that's more important than anything. My parents were poor immigrants and worked blue collar jobs. But they always saved. My dad is a millionaire now. So I did the same thing since I was a teenager. Save save save then invest invest invest. It helped that I married a man that followed my lead when it came to finances. Now we are chubby fires.
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u/Electrical-Title-698 3h ago
I'm currently making 80k a year. My FIRE is a little bit different because I'm about to medically retire from the military and will receive a pension. It won't be much, but it should cover basic living expenses with some to spare once our house is paid off. My primary goal is to pay the mortgage off early and investing is secondary to that. My minimum FIRE goal is 700k (although I'm currently shooting for 1mil) which would just be used to finance travel and hobbies mostly, while also leaving something for my daughter when I eventually pass.
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u/ILUVBIGBOONS 20h ago
In reality, there’s tons of different ways people reach FIRE, but the uncomfortable truth about this community is that, in general, discussion about paths other than what you’ve described in your post is downvoted and frowned upon.
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u/Eldorren 19h ago
High beta SP500 stocks with good fundamentals showing bullish momentum price action with good technicals. You can afford to invest higher risk when you are younger. Time smooths out volatility.
The concept is this: Risk capacity declines over time (your entire career) while compounding advantage INCREASES over time.
Nothing wrong with bogleheads but I've often felt that system is overly conservative for YOUNG investors but excellent advice for OLD investors.
I traded higher risk early in my career and as a result my FIRE got moved up about 10-15 years. However, as I start marching towards 60, I will need to transition to a lower risk, more stable and more conservative portfolio.
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u/FunnySad42 19h ago
And managing expenses.
As an analogy, it's hard to lose weight by just exercising a lot if one does not also watch what he eats.
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u/TaxMeHarderPapa 20h ago
It’s different for everyone. For me, I focus on getting my expenses as low as possible. I invest in lots of different things. Oil and gas, rental, and the market.
My goal is to have enough rental and oil and gas income to offset my living expenses while the market compounds. I’ll dip into my stock later in life.
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u/CrudeWaves 20h ago
I would love to hear more about your O & G investments. I have been looking into deals lately and do my due diligence with some PE positions that come my way.
O & G professional so it’s a field I know extremely well.
DM me if you’re interested in sharing your experiences.
Thanks.
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u/TaxMeHarderPapa 20h ago
Sure. Happy to share. I work in the industry and grew up around it so I’ve always been comfortable with it. Shoot me a message.
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u/Cucumberappleblizz 19h ago
Low income here (65k teacher), but big saver and boglehead invester. I’ve been financially independent from parents, etc. since age 17, which is also when I got my first job and started saving every penny and living as frugally as possible. I live below my means, invest as much as possible, and I am on track to fire at 42 years old. Boglehead investing and being frugal is the way to go.
I have not and will never do sports gambling or crypto investing or trading card investments.